2017...2017/08/23 · were listed on 8 june 2017, bringing the share capital of superlon to a size...

Superlon Holdings B

erhad (740412-X) A

NN

UA

L REPO

RT 2017

Superlon Holdings Berhad(740412-X)

Superlon Holdings Berhad (740412-X)

Lot 2567, Jalan Sungai Jati, 41200 Klang, Selangor Darul Ehsan.Tel: 603-3372 3888 Fax: 603-3382 1688 Email: [email protected]

www.superlon.com.my

ANNUAL REPORT

2017

SUPERLON is Malaysia’s leading manufacturer of high quality thermal insulation materials used mainly in the Heating, Ventilation, Air Conditioning and Refrigeration (HVAC&R) system of residential, commercial and industrial buildings. The company’s thermal insulation products are used as vapor barrier for the prevention of condensation or frost formation on cooling systems, chilled water and refrigeration lines and heat loss reduction for hot water plumbing, heating and dual temperature piping.

Mission Statement• To be recognized globally as a reliable manufacturer of quality

thermal insulators.

• To build a global brand name within the thermal insulation industry.

• To continuously be innovative in the application of elastomeric acrylonitrile butadiene rubber across other industries.

Vision Statement• To be a company that contributes to the overall reduction of

global energy consumption through the manufacturing of quality products, particularly in the area of thermal insulators.

In addition to the manufacturing of thermal insulation materials, SUPERLON is also involved in trading of HVAC&R parts and equipment. The existing product ranges for our trading business include the following:-

1) Copper Tubes, Fittings and Driers

2) Refrigerant Gas

3) Refrigerator Compressor, Vacuum Pump and Motor Fan

4) Temperature Controller, Digital Thermometer and Refrigerator Gauge.

HVAC&R PARTS

INSULATION SHEETS & ROLLS

SUPERLON sheets are available in pre-cut sizes or in rolls.

INSULATION TUBES

Definitions:Except where the context otherwise requires, the following definitions shall apply throughout this Annual Report:Act : The Companies Act 2016AGM : Annual General MeetingBoard : Board of Directors of SuperlonBursa Securities : Bursa Malaysia Securities BerhadFYE : Financial year ended 30 AprilLR : Main Market Listing Requirements of Bursa SecuritiesSuperlon or The Company : Superlon Holdings BerhadSuperlon Group or The Group : Superlon and its subsidiaries

Chairman’s Statement 2 – 3CORPORATECorporate Information 4Corporate Structure 5PERFORMANCE REVIEWFinancial Highlights 6 – 7Management Discussion & Analysis 8 – 13PERSONNELProfile of Directors 14 – 17Profile of Key Management 18GOVERNANCEStatement of Corporate Governance 19 – 30Audit Committee Statement 31 – 32Statement of Risk Management and Internal Control 33 – 34FINANCIALSFinancial Statements 35 – 114List of Properties 115SHAREHOLDINGSAnalysis of Shareholdings 116 – 117ANNUAL GENERAL MEETINGNotice of AGM & Statement Accompanying Notice of AGM 118 – 122Proxy Form

CONTENTS

2

SUPERLON HOLDINGS BERHAD (740412-X) Incorporated in Malaysia

CHAIRMAN’S STATEMENT

On behalf of the Board of Directors (“Board”) of Superlon Holdings Berhad (“Superlon” or “the Company”), it is my pleasure to present the Annual Report of the Superlon group of companies (“Superlon Group” or “the Group”) and of the Company for the FYE 30 April 2017 (“FYE 2017”).

FINANCIAL PERFORMANCE

It has been an exciting year for the Group, having achieved another record-breaking revenue and profit year in FYE 2017. Our revenue surpassed the RM100 million mark for the first time, by achieving RM106.3 million (2016 : RM90.4 million), thereby lifting our profit after tax for the year to RM23.7 million (2016:RM16.7 million). Our revenue has grown by 17.5% whilst profit after tax improved by 42.3%, driven by increased sales volume, improved production methods, favourable exchange rates and economies of scale of production.

DIVIDENDS

As a commitment to our shareholders for them to participate in the profits of Superlon, the Board has adopted a dividend policy to pay out at least 30% of its audited consolidated profit after tax attributable to shareholders for each financial year, after excluding non-operating income that is capital in nature.

For the FYE 2017, the Company had in August 2016 and January 2017 paid the first and second interim single-tier dividends of 2.5 sen per ordinary share each. In May 2017, the Company had further paid a special single-tier dividend of 6 sen per ordinary share.

The total single-tier dividends of 11 sen per ordinary share declared and paid for FYE 2017 represents an increase of about 22% over last year’s total dividend of 9 sen per ordinary share and a payout ratio of approximately 37% of FYE 2017’s profit attributable to the shareholders of the Company.

CORPORATE EXERCISE

Post FYE2017, the Board had implemented a share split of Superlon’s shares from one ordinary share to two ordinary shares to enhance the liquidity of the shares and to encourage a wider shareholder base for Superlon. The split shares were listed on 8 June 2017, bringing the share capital of Superlon to a size of 160,000,000 ordinary shares.

PROSPECTS AND OUTLOOK

The construction of the warehouse adjacent to our existing factory is complete. The new warehouse will allow us to improve our production processes and meet our customers’ orders in a timelier manner.

On the back of encouraging demand, we have expanded our Vietnam operations by incorporating a Vietnamese subsidiary and will invest approximately USD4 million to set up a new factory in Vietnam. Barring unforeseen circumstances, the Vietnam factory should be ready for commissioning in FYE2019. Our investments in Vietnam are intended to strengthen our market presence and better support our customers in Vietnam and neighbouring countries.

The expansion plans will place us on a higher level of capacity as we ready ourselves to achieve greater heights. We are not complacent over our success and will continue to work towards loftier targets for the betterment of the Company.

3

ANNUAL REPORT 2017

Chairman’s Statement(cont’d)

APPRECIATION

The Board herein expresses its heartfelt gratitude to its dedicated management and staff for their unwavering passion and untiring commitment towards attaining the continuing success and growth of the Group. A sincere note of appreciation is also extended to our valued customers, business associates, government authorities, bankers, suppliers and shareholders.

In addition, I take pleasure in thanking my fellow Board members for their dedication in discharging their duties in leading and guiding the Group.

The Board continues to look forward to new heights with the continued support from all stakeholders.

LIM E @ LIM HOON NAMChairman

for a cooler tomorrow

4


CORPORATE INFORMATION

BOARD OF DIRECTORS

Lim E @ Lim Hoon Nam (Independent Non-Executive Chairman)

Liu Lee, Hsiu-Lin @ Jessica H. Liu(Managing Director andChief Executive Officer)

Liu Han-Chao(Executive Director)

Ongi Cheng San(Executive Director)

Chun Kwong Pong(Non-Independent Non-Executive Director)

Yee Wei Meng(Non-Independent Non-Executive Director)

Lim Wee Keong(Independent Non-Executive Director)

AUDIT COMMITTEE

Lim E @ Lim Hoon Nam (Chairman)Lim Wee KeongYee Wei Meng

NOMINATION COMMITTEE

Chun Kwong Pong (Chairman)Lim E @ Lim Hoon NamLim Wee Keong

REMUNERATION COMMITTEE

Chun Kwong Pong (Chairman)Lim Wee KeongYee Wei Meng

COMPANY SECRETARY

Pang Kah Man (MIA 18831)

REGISTERED OFFICE

3-2, 3rd Mile SquareNo. 151 Jalan Kelang LamaBatu 3½58100 Kuala Lumpur Tel : 603-7987 5300Fax : 603-7987 5200

PRINCIPAL PLACE OF BUSINESS

Lot 2567, Jalan Sungai Jati41200 KlangSelangor Darul EhsanTel : 603-3372 3888 / 3382 1688Fax : 603-3371 5888Website : www.superlon.com.my

AUDITORS

Crowe Horwath (AF 1018)Chartered AccountantsMuar Office, 8 Jalan Pesta 1/1Taman Tun Dr. Ismail 1Jalan Bakri84000 Muar, JohorTel : 606-952 4328Fax : 606-952 7328

SOLICITORS

Christina Chia Law Chambers

SHARE REGISTRARS

Tricor Investor & Issuing House Services Sdn BhdUnit 32-01, Level 32, Tower AVertical Business SuiteAvenue 3, Bangsar SouthNo. 8 Jalan Kerinchi59200 Kuala LumpurTel : 603-2783 9299Fax : 603-2783 9222

PRINCIPAL BANKERS

CIMB Bank BerhadUnited Overseas Bank (Malaysia) BhdAmBank Malaysia BerhadPublic Bank BerhadHong Leong Bank BerhadMalayan Banking Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities BerhadStock Name : SUPERLNStock Code : 7235

INVESTOR RELATIONS

Shareholders, investors and members of the public are invited to access the Company’s website at www.superlon.com.my or Bursa’s website for announcements made at www.bursamalaysia.com for information on the Group’s operations and latest developments. For further details, please contact the following via [email protected]:-

Mr Liu Han-Chao Mr Lim E @ Lim Hoon NamExecutive Director Senior Independent Chairman

5

ANNUAL REPORT 2017

SUPERLON HOLDINGS BERHAD (740412-X)Investment holding and provision of management services

Superlon Worldwide Sdn Bhd

Superlon Solutions Sdn Bhd

Superlon Worldwide (India) Private Limited

Superlon Hong Kong Co. Limited

Trading of HVAC&R parts & equipments

Dormant

Dormant

Superlon Vietnam Company Limited

Superlon Singapore Private Limited

Investment holding company

Dormant

Design, test and manufacture of thermal insulation materials mainly for the heating, ventilation, air-conditioning and refrigeration (“HVAC&R”) industry and trading of HVAC&R parts and equipments

100%

100%

100%

100%

100%

100%

CORPORATE STRUCTURE

6


RM106.3 million (+17.5%)

REVENUE FROM CONTINUING OPERATIONS REVENUE FROM CONTINUINGOPERATIONS

NET ASSETS NET ASSETS

PROFIT ATTRIBUTABLE TOOWNERS OF THE COMPANY

PROFIT ATTRIBUTABLE TOOWNERS OF THE COMPANY

2016: RM90.4 million

RM23.7 million (+42.3%)


RM108.0 million (+20.7%)


FYE

2017

2016

2015

2014

2013

RM million

106.3

90.4

58.9

61.8

74.5

FYE

2017

2016

2015

2014

2013

RM million

16.7

23.7

4.1

5.9

9.4

FYE

2017

2016

2015

2014

2013

RM million

89.4

55.8

59.1

79.9

108.0

FINANCIAL HIGHLIGHTSFor the financial years ended 30 April 2013 to 2017

7

ANNUAL REPORT 2017

DIVIDEND PER SHARE #

Note:-# prior to the share split implemented in June 2017



EARNINGS PER SHARE #

29.87 sen(+42.3%)

EARNINGS PER SHARE #

DIVIDEND PER SHARE #

NET ASSETS PER SHARE #

2016: 20.98 sen

136.01 sen(+20.7%)

2016: 112.65 sen

11 sen (+22.2%)

2016: 9.0 sen

NET ASSETS PER SHARE #

FYE Sen

2017

2016

2015

2014

2013

112.65

136.01

69.90

74.28

100.67

FYE Sen

2017

2016

2015

2014

2013

9.00

1.75

3.25

6.00

11.00

2017

2016

2015

2014

2013

20.98

29.87

5.20

7.34

11.81

FYE Sen

Financial Highlights (cont’d)

8


MANAGEMENT DISCUSSION AND ANALYSIS

1. GROUP’S OBJECTIVES AND STRATEGIES FOR SIGNIFICANT BUSINESSES AND OPERATIONS

1.1. Overview of Principal Activities

Our Group is a leading nitrile butadiene rubber (“NBR”) foam insulation manufacturer with more than twenty years of experience. We deliver to our customers quality products, prompt and reliable services via our three (3) plants located in Selangor, Malaysia.

Our NBR foam products are used mainly to insulate heating, ventilation, air-conditioning and refrigeration (“HVAC&R”) systems, reduce vibration and corrosion. We have applied our NBR foam technology to manufacture sports mats, grips and sound insulation products. Our insulation products are sold in countries in Asia, Africa, the Americas as well as Europe.

Superlon trades in HVAC&R parts and equipment that complements our insulation products.

1.2. Focus and Strategies

Superlon aims:

• Toberecognizedgloballyasareliablemanufacturerofqualitythermalinsulators• Tobuildaglobalbrandnamewithinthethermalinsulationindustry• Tocontinuouslybeinnovateintheapplicationofelastomericacrylonitrilebutadienerubberacrossother

industries.

Superlon’s products are globally known and exported to more than 70 countries. In line with our mission, continuous efforts are in place to penetrate into new markets.

Our investments in research and development activities have enabled us to make consistent and reliability products that are globally recognised in the thermal insulation industry. In recognition of our management systems and product quality, Superlon has received many international certification including:-

i) ISO 9001 – Quality Management System Standard;ii) ISO 14001 – Environment Management System Standard;iii) FM Approvals Class : 4924;iv) TÜV SÜD PSB;v) Sirim QAS International; andvi) Certificate of Material Approval from Jabatan Bomba and Penyelamat Malaysia.

Our focus will continue to be on the following:-

(a) research and development to further enhance our methods of production and product quality;(b) penetrate new markets and enhance our visibility as well as distribution network; and(c) provide our customers with faster response, better support and superior services to enhance the customer

experience.

We believe that these focus areas will enable us to expand demand for our products.

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ANNUAL REPORT 2017

Management Discussion and Analysis(cont’d)

2. GROUP FINANCIAL PERFORMANCE

The financial performance of our Group in financial year ended 30 April 2017 (“FYE 2017”) as compared to financial year ended 30 April 2016 (“FYE 2016”) is summarized below:-

Group FYE 2017RM’000

FYE 2016RM’000

Variance%

Financial Results Revenue 106,269 90,411 17.5Gross profit 44,045 35,294 24.8Other income 2,996 950 215.4Profit before tax 30,223 21,362 41.5Profit for the year 23,715 16,660 42.3

Financial Position

Property, plant and equipment 71,520 56,317 27.0Deposits, cash and bank balances 32,393 30,398 6.6Loans and borrowings 10,368 2,869 261.4Equity attributable to shareholders 107,988 89,444 20.7

Financial Ratios

Gross profit margin (%) 41 39 5.1Net profit margin (%) 22 18 22.2Gearing ratio (times) 1 – – –Net assets per share (sen) 2 136.01 112.65 20.7Basic earnings per share (sen) 2 29.87 20.98 42.3

Notes:-

1. Being total group loans and borrowings (net of deposits, cash and bank balances)/ total group equity2. Based on the number of shares prior to the Share Split implemented on 8 June 2017

2.1. Revenue

RM’000 FYE 2016 FYE 2017 YoY %

Insulation (export)

70,171 79,802 +13.7%

Insulation (local)

14,595 16,466 +12.8%

Trading & others

5,645 10,001 +77.2%

Our Group’s revenue increased by 17.5% to approximately RM106.3 in FYE 2017 (FYE 2016: RM90.4 million). Approximately 75% of our revenue is derived from export sales, which are predominantly in US Dollar (“USD”). Local revenue accounts for the balance 25% with insulation sales making up 16% and sales from trading activities accounting for about 9%. The revenue growth was mainly driven by the increase in sales volume and favourable USD exchange rate against Malaysian Ringgit (“Exchange Rate”). The higher sales volume was attributable to rising demand for our products in both Malaysia and export markets.

9%

16%

75%

TotalRevenue

RM106.3 m

Insulation (export)

Trading & others

Insulation (local)

10


2. GROUP FINANCIAL PERFORMANCE (CONT’D)

2.1. Revenue (cont’d)

RM’000 FYE 2016 FYE 2017 YoY %

Export 70,171 79,918 +13.9%

Malaysia 20,240 26,351 +30.2%

Export revenue climbed to RM79.9 million of our Group’s revenue in FYE 2017 (FYE 2016: RM70.2 million) representing an increase of 13.9%. Growth in export revenue was due to the growth opportunities emanating from Africa, Asia and Oceania. We believe that through diversifying our geographical coverage, our revenue hence is less reliant on any single country/market.

Revenue from Malaysia jumped to about RM26.4 million in FYE 2017 (FYE2016: RM20.2 million) representing a growth of 30.2%. The growth is attributed to increased contribution from both insulation and trading divisions. The insulation division revenue achieved RM16.5 million (FYE 2016: RM14.6 million) equating to a growth of 12.8%, mainly attributed to higher sale volume. Our trading division registered revenue of RM9.9 million (FYE 2016: RM5.6 million) being a record growth of 75.1%, mainly contributed by improvement in copper pipes sales.

Contributionof Revenuein MalaysiaRM’000

FYE 2016 FYE 2017 YoY %

Insulation 14,595 16,466 +12.8%

Trading & others 5,645 9,885 +75.1%

Total revenue 20,240 26,351 +30.2%

2.2. Profits

Our profit before tax (“Pre-tax Profit”) increased by 41.5% to RM30.2 million (FYE 2016: RM21.4 million) on the back of a higher Group’s revenue and better gross profit margin (“GP Margin”) of 41.45% (FYE 2016: 39.04%). Improvement in our GP Margin is a result of better margins achieved in the insulation material division.

In FYE 2017, our other income increased by 215.4% to RM3.0 million (FYE 2016: RM1.0 million) mainly as a result of a higher realized gain on foreign exchange of RM1.1 million (FYE 2016: RM RM0.3 million), higher interest income of RM0.79 million (FYE 2016: RM0.48 million) and a reversal of impairment loss on receivables of RM0.2 million (FYE 2016: RM0.05 million).

Our selling and distribution expenses increased by 10.5% to RM6.6 million (FYE 2016: RM5.9 million) mainly due to increased marketing and promotional activities especially on the international front and also increase in freight charges in proportion to increase in sales. Our administration expenses increase of 19.9% to RM10.1 million (FYE 2016: RM8.4 million) mainly due to higher staff cost to support of our growth and expansion.


Export Malaysia75% 25%

TotalRevenue

RM106.3 m

75%

25%

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ANNUAL REPORT 2017

3. REVIEW OF OPERATING ACTIVITIES

3.1. Insulation division

Overview

The insulation division is primarily involved in manufacturing of thermal insulation materials, a part of HVAC&R system installed in residential, commercial and industrial buildings. Our insulation materials are distributed down to the supply chain through a network of wholesalers and distributors and are subsequently sold the domestic market as well as exported to countries in Africa, America, Southeast Asia, Europe and Oceania.

Manufacturing of insulation products

The revenue derived from insulation division rose by 13.6% to RM96.3 million in FYE 2017 (FYE 2016: RM84.8 million), contributing 90.6% of the Group’s total revenue. The growth in revenue was mainly attributable to robust demand and growing industrialisation in emerging economies.

On the back of the rise in our revenue, the gross profit from our insulation division achieved RM43.3 million in FYE 2017 (FYE 2016: RM34.8 million), representing an increase of 24.5% as compared to the last financial year. We recorded a gross profit margin of 45% (FYE 2016: 41%) for the insulation division. The strong USD environment has had positive effects on the topline of the company’s results but was partially offset at the gross profit margin level as we import a portion of our raw materials, which are denominated in USD. Consequently, we believe the profitability of our insulation division will continue to be driven by volume growth, research and development as well as production efficiency.

Moving forward

The construction of the new centralised warehouse was completed during FYE 2017. Upon the effective utilisation of the 63,357 square feet warehouse, we anticipate that our production would be able to benefit from more efficient production runs resulting from fewer changeovers to fulfill customer demands for different sizes and specifications of insulation products. The warehouse would also enable us to respond to customer orders in a timelier manner with available stock. We believe this would enable Superlon to expand our customer base.

To further grow our capacity and reach, our Group has expanded our presence in Vietnam by incorporating a wholly-owned Vietnamese subsidiary and announced plans to invest about USD4 million to set up a new factory (“Factory 4”) there. Factory 4 would enable us to strengthen and support our customers in Vietnam and neighbouring countries. Construction of Factory 4 is expected to commence by October 2018 and start production in FYE 2019.

We move forward with cautious optimism as we are cognisant of the challenges faced by us, including volatile exchange rates, fluctuating raw material prices and geopolitical issues in Asia. The management has and will continue to factor in exchange rates movements and fluctuating raw material prices to develop appropriate pricing and marketing strategies to maintain the competitiveness of our products. The uncertainties emanating from the geopolitical issues encourages us to maintain a healthy financial position to weather economic changes and develop new markets outside Asia, that would in the longer term enable us to diversify our revenue base.

3.2. Trading division

Trading division primarily sells parts and equipment for HVAC&R domestically to wholesalers and distributors.

The revenue derived from trading division increased by 77.2% to RM10.0 million in FYE 2017 (FYE 2016: RM5.6 million), amounting to 9.4% of the Group’s total revenue. The gross profit of trading division achieved about RM0.7 million (FYE 2016: RM0.5 million), representing an increase of 50.4% as compared to previous financial year. The growth in revenue was mainly attributable to higher copper tube sales.


12


4. FINANCIAL POSITION

4.1. Inventories

Our inventories increased to RM19.8 million (FYE 2016: RM8.5 million) representing an increase of 133% as compared to last financial year. The increase in inventories is mainly attributed to the increase in raw material stock that is inline with our plans to utilise the warehouse.

4.2. Deposits, cash and bank balances

Deposits, cash and bank balances of our Group as at 30 April 2017 amounted to RM32.4 million (FYE 2016: RM30.4 million), representing an 6.6% increase as compared to last financial year. Our Group is prudent in maintaining sufficient cash balances for working capital requirement, funding committed credit facilities and dividend payout.

4.3. Loans and borrowings

Loans and borrowings of our Group increased to RM10.4 million (FYE 2016: RM2.9 million) as a result of financing taken for construction of the new warehouse. Our financial position remains strong as the Group remains in the net cash position.

4.4. Dividends

The Board of Directors, having considered the plans and needs of the company, has announced a dividend policy targeting a payout ratio of at least 30% of its audited consolidated profit after taxation attributable to shareholders for each financial year, after excluding non-operating income that is capital in nature. Taking effect from the financial year ending 30 April 2018, it reflects the Board’s intention to allow shareholders to participate in the profits of Superlon whilst retaining sufficient reserves for future growth.

The Company had in August 2016 paid a first interim tax-exempt single-tier dividend of 2.5 sen per ordinary share. A second interim tax-exempt single-tier dividend of 2.5 sen per ordinary share1 was paid in January 2017. In May 2017, the Company had further paid a special tax-exempt single-tier dividend of 6 sen per ordinary share1 for the FYE 2017.

The total single-tier dividend of 11 sen per ordinary share1 declared and paid for FYE 2017 represents an increase of 22% over last year’s total dividend of 9 sen per ordinary share and a total dividend payout ratio of approximately 36.8% of our Group’s net profit.

The Company is not recommending any final dividend payment for FYE 2017.

5. OUTLOOK AND PROSPECTS

5.1. Corporate proposal

Superlon Holdings Berhad (“The Company”) had on 7 April 2017 announced a proposal to undertake a share split involving the subdivision of every one (1) existing ordinary share held by the shareholders of the company into two (2) ordinary shares (“Share Split”). Bursa Malaysia Securities Berhad and the shareholders of Superlon had, vide its letter dated 27 April 2017 and at an extraordinary general meeting on 19 May 2017, approved the Share Split.

Upon the completion of the Share Split, the number of issued shares had increased from 80 million to 160 million on 8 June 2017. Whilst the corporate exercise had no effect on the net assets, earnings and gearing of the Group, the net assets per share and earnings per share will reduce proportionately arising from the increase in the number of issued shares pursuant to the Share Split.


1 Based on the number of shares prior to the Share Split implemented on 8 June 2017

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ANNUAL REPORT 2017

5.2. Global economy and industry trends

The moderate global growth during year 2016 was driven by subdued investment activities and weak commodity price in major economies. Without being affected by considerable external and domestic headwinds in year 2016, Malaysian economy registered a growth of 4.2%, anchored by domestic demand which is underpinned by private spending. Bank Negara Malaysia projected that Malaysian economy to register 4.3% to 4.8% growth in year 2017, supported by recovery in global commodity market and improvement in global growth.

(Source : Bank Negara Malaysia Annual Report 2016)

Further expansion of global economy in the first quarter of 2017 was resulting from higher synchronised growth across the countries. In particular, manufacturing activity was supported by a broad-based expansion in demand from consumers and businesses. The Malaysian economy recorded a higher growth of 5.6% in the first quarter of 2017 arising from higher exports which were boosted by the rising demand for manufactured products. Private sector activity was higher and remained as the main driver of growth. Thus, it can be seen that domestic demand will continue to drive Malaysian economy due to dynamic private sector activities.

(Source : Economic and Financial Developments in the Malaysian Economy in the First Quarter of 2017)

Foreign exchange rates during the financial year remain volatile with the USD to MYR trading between a low of RM3.86 to a high of RM4.49. Superlon retains sufficient amount of cash denominated in USD to meet our working capital requirements. The approach provides us a natural hedge whilst facilitating our import of raw materials, which are also USD-denominated.

5.3. Eyeing on high-growth Asian markets

Source: Asian Development Bank

According to Asian Development Bank, GDP growth forecast for India and Association of Southeast Asian Nations (“ASEAN”) are 7.4% and 4.8% respectively in 2017. Vietnam is projected to have highest GDP growth rate of 6.5% among ASEAN in 2017 driven by massive foreign direct investment in construction in the country. (Source: Asian Development Outlook 2017, Asian Development Bank). This augurs well for Superlon as Asia is our key market and focus region.

Potential sales opportunities are anticipated as the rapid development of construction segment in the emerging Asian markets, through its spillover effect, will raise the demand of thermal insulation materials and other parts used in HVAC&R. Our Group is well positioned to capture the growing market due to our geographical proximity and increased production capacity provided by the new centralised warehouse.


4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 8.50%

2014 2015 2016 2017 forecast

2018 forecast

GDP growth rate, %

ASEAN

Vietnam

India

14


PROFILE OF DIRECTORS

LIM E @ LIM HOON NAMIndependent Non-Executive Chairman

Lim Hoon Nam, male, a Malaysian aged 73, was appointed to the Board on 31 January 2007. He holds a Bachelor’s degree in Accountancy from National Chengchi University, Taiwan and Bachelor degree in Commerce from Otago University, New Zealand. He is a member of the Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants and Chartered Accountants of Australia and New Zealand.

Lim Hoon Nam has been practising as an accountant since 1977 under his own audit firm, Lim Hoon Nam & Co.

Lim Hoon Nam does not hold any directorship in any other public companies.

He does not have any family relationship with any of the other Directors and/or major shareholders of the Company. He has no material conflict of interest with the Group other than that which has been disclosed to the Board of Directors. He has not been convicted of any offences within the past 5 years and has not been imposed any publicly sanctions or penalty by the relevant regulatory bodies during the financial year. The interests of directors in the shares of the Company and its related corporations are disclosed in Directors’ Shareholdings on page 116 of this Annual Report.

LIU LEE, HSIU-LIN @ JESSICA H. LIUManaging Director and Chief Executive Officer

Jessica H. Liu, female, a Taiwanese & Australian aged 60, was appointed to the Board on 31 January 2007. She graduated from Ming Chuan Commercial and Management College, a local college in Taiwan with a Secretarial Science and Management degree qualification in 1978.

In 1983, she co-founded TransAsia Rubber Industrial Co Ltd, a Taiwanese company principally involved in the manufacturing of rubber thermal insulation products and she was a Director and shareholder of the company from 1983 to 1997. In 1992, she founded Villa Mutiara Sdn Bhd manufacturing rubber insulation and the company’s name was subsequently changed to Superlon Worldwide Sdn Bhd.

Jessica H. Liu has more than 34 years’ working experience in the rubber thermal insulation industry and has todate accumulated in-depth knowledge in management skills and the business of the thermal insulation industry.

She does not hold any directorships in any other public companies. Apart from her son, Liu Han-Chao, who is also an Executive Director of the Company, she does not have any family relationship with any of the Directors of the Company. She is a major shareholder of the Company. She has no material conflict of interest with the Group other than that which has been disclosed to the Board of Directors. She has not been convicted of any offences within the past 5 years and has not been imposed any publicly sanctions or penalty by the relevant regulatory bodies during the financial year. The interests of directors in the shares of the Company and its related corporations are disclosed in Directors’ Shareholdings on page 116 of this Annual Report.

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ANNUAL REPORT 2017

Profile of Directors(cont’d)

LIU HAN-CHAOExecutive Director

Liu Han-Chao, male, an Australian aged 35, was appointed to the Board on 6 November 2007. He graduated with a Diploma in Business major in marketing and a Bachelor of Business degree with double major in Management and Marketing from Queensland University of Technology, Australia in 2005. He joined the Superlon group in November 2005 as Sales and Marketing Manager of Superlon Worldwide Sdn Bhd. He was subsequently appointed to the position of Senior Manager in January 2007.

Currently, Liu Han-Chao is the head of the Marketing Department where he is responsible for formulating marketing and business strategies for new markets, implementing marketing and business strategies and developing marketing programmes to measure and forecast market demand within the Superlon group.

Liu Han-Chao does not hold any directorship in any other public companies.

Apart from his mother, Liu Lee, Hsiu-Lin @ Jessica H. Liu who is also the Managing Director and a major shareholder of the Company, he does not have any family relationship with any of the Directors of the Company. He has no material conflict of interest with the Group other than that which has been disclosed to the Board of Directors. He has not been convicted of any offences within the past 5 years and has not been imposed any publicly sanctions or penalty by the relevant regulatory bodies during the financial year. The interests of directors in the shares of the Company and its related corporations are disclosed in Directors’ Shareholdings on page 116 of this Annual Report.

ONGI CHENG SANExecutive Director

Ongi Cheng San, male, a Malaysian aged 46, was appointed to the Board on 25 March 2010. He is a member of the Association of Chartered Certified Accountants, UK and a Chartered Accountant registered with the Malaysian Institute of Accountants.

Ongi Cheng San has over 24 years of working experience in finance and accounting. He was appointed as Accountant in Superlon Worldwide Sdn Bhd in June 2003 and prior to his appointment as Executive Director, he was the Chief Accountant who is responsible for corporate, finance, accounting, secretarial, taxation and audit matters of the Group.

Prior to joining the Group, he has been working for listed and unlisted companies involved in automotive parts, securities trading and construction.

Ongi Cheng San does not hold any other directorship in any public companies.


16



CHUN KWONG PONGNon-Independent Non-Executive Director

Chun Kwong Pong, male, a Malaysian aged 45, was appointed to the Board on 24 October 2007.

He graduated from Monash University, Australia in 1993 with a Bachelor of Business (Accounting) and is a Chartered Accountant registered with the Malaysian Institute of Accountants and a Certified Practising Accountant under CPA Australia. He is currently a Director of cfSolutions Sdn Bhd, a corporate finance advisory company licensed under the Capital Market and Services Act, 2007.

He was formerly with a property development company listed on the Main Market of Bursa Malaysia Securities Berhad from 2000 to 2005 and last held the position of General Manager, Corporate Planning. From 1997 to 2000, he worked with AmInvestment Bank Berhad’s Corporate Finance Department where he handled flotations, restructurings, fund raising as well as mergers and acquisitions. Prior to that, he was with Ernst & Young where he has audited companies from a spectrum of industries.

He is serving as an Independent Non-Executive Director on the Board of Fusionex International PLC.


LIM WEE KEONGIndependent Non-Executive Director

Lim Wee Keong, male, a Malaysian aged 44, was appointed to the Board on 27 March 2008. He graduated from University of Sheffield, UK in 1996 with B. A. (Hons) in Accounting and Financial Management.

He has more than 19 years’ experience in manufacturing management and operations, water treatment and engineering, financial and human resources management, technology research and development, and manufacturing integration and transformation, involving local and international entities. Lim Wee Keong is the co-founder & Technical & Operations Director of Trident Water & Process Technologies (M) Sdn Bhd, a process design, system integrating and engineering system provider for drinking water, process water, wastewater and water reuse/recycling solutions since 2006.

Lim Wee Keong does not hold any directorship in any other public companies.


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ANNUAL REPORT 2017


YEE WEI MENGNon-Independent Non-Executive Director

Yee Wei Meng, male, a Malaysian aged 39, was appointed to the Board on 1 January 2013. He holds a Master degree in Business Admin from Charles Sturt University, Australia, CLP Malaysia and LL.B (Hons) from University of Leicester, England.

Yee Wei Meng is a qualified lawyer in Malaysia. Prior to 2004, he worked as legal assistant in various advocates and solicitors firms where he was responsible for conveyancing, corporate finance and litigation matters for two years.

He has served on the Board of Fontern International group of companies involving in all kinds of business such as steel & hardware trading, oil palm & rubber plantations, plantations development, property & share investment, business investment acquisition, property development and hotel industry and assured the role as the Group Managing Director since 2004. He is also in charge of daily business operations, accounts, legal matters, marketing and business expansion.


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PROFILE OF kEY MANAGEMENT

Mr Liu Han-Chao and Mr Ongi Cheng San are also the key senior management of the Superlon Group. In addition, the profile of other key senior management are as follows:-

JOANNA, CHUANG PI JUExecutive Assistance to Managing Director

Joanna Chuang Pi Ju, a Taiwanese female aged 39, is the Executive Assistant to Managing Director for Superlon Worldwide Sdn Bhd. She obtained a Master in Business Administration from University of Central Oklahoma in 2004.

Joanna worked for three years as Senior Financial Executive in another company before joining the Superlon Group as Logistics and Shipping Executive in February 2009. She was promoted to Marketing Manager to handle sales and export matters and maintaining customer relationship. In January 2015, she was appointed as the Executive Assistance to Managing Director. She now assists the Managing Director in overseeing the operations and handling human resources and administrative matters.

Joanna does not hold any directorship in any other public companies.

She does not have any family relationship with any of the other Directors and/or major shareholders of the Company. She has no material conflict of interest with the Group other than which has been disclosed to the Board of Directors. She has not been convicted of any offense within the past 5 years and has not been imposed any publicly sanctions or penalties by the relevant regulatory bodies during the financial year. She does not have any interest in the shares of the Company and its related corporations.

FU SHIH-KANGProduction Manager

Fu Shih-Kang, a Taiwanese male aged 37, is Production Manager for Superlon Worldwide Sdn Bhd. He holds a Bachelor’s degree from Yuanpei University of Medical Technology.

Fu, Shih-Kang worked in a chemical manufacturing company in Taiwan for three years until 2010 as Chemical Engineer & Formulation Manager. He joined the Superlon Group as Assistant Research & Development (“R&D”) Manager. He was promoted to R&D Manager to oversee the production development and product research and development. In January 2015, he was appointed as Production Manager. He now oversees the factory management, production as well as product research and development.

Fu does not hold any directorship in any other public companies.

He does not have any family relationship with any of the other Directors and/or major shareholders of the Company. He has no material conflict of interest with the Group other than which has been disclosed to the Board of Directors. He has not been convicted of any offense within the past 5 years and has not been imposed any publicly sanctions or penalties by the relevant regulatory bodies during the financial year. He does not have any interest in the shares of the Company and its related corporations.

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ANNUAL REPORT 2017

STATEMENT OF CORpORATE GOvERNANCE

THE CODE OF CORPORATE GOVERNANCE

The Board is committed to practising good corporate governance to focus the Superlon Group towards enhancing business value and long term value for its stakeholders as the underlying principle in discharging its responsibilities.

The Board is satisfied that the Company has complied with the principles and recommendations of the Malaysian Code of Corporate Governance 2012 except otherwise stated and in such circumstances, the rationale have been duly included herein.

The Board takes cognisance of the new Malaysian Code on Corporate Governance 2017 (“MCCG 2017”) and will henceforth look into the practices in MCCG 2017 for future compliance.

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

1.1 Clear functions of the Board and the management

The Board has clear functions established for the Board vis-à-vis the management respectively.

The Board sets the strategic direction of the Group, establishing visions and goals for the management and continuously monitors its performance so as to protect and enhance shareholders’ value. The Board is responsible for the overall standards of strategic planning, conduct, risk management, succession planning, investor relations programme as well as the system of internal controls within the Group.

The Board delegates some of its authorities and discretion to the Managing Director, Executive Directors and management as well as the Board Committees.

The Managing Director and Executive Directors are primarily responsible for the implementation of the strategies set by the Board and manage the day-to-day operation and administrative functions. Management support the Executive Directors and implement the running of the financial and general operations of the Company. Through the periodic budgets and capital expansion plans prepared, the Board develops and agrees with the Managing Director the corporate objectives and strategic plans, including the long-term goals and performance targets of the Company.

The Independent Non-Executive Directors provide objective and independent judgement to the decision making of the Board which provides an effective check and balance to the Board’s decision-making process.

To assist the Board in fulfilling its roles, the board has three (3) committees, namely Audit Committee, Nomination Committee and Remuneration Committee, to support and assist in discharging its fiduciary duties and responsibilities. The respective functions and terms of reference and authority of the board committees have been defined by the Board. The committees report and make recommendations to the Board on matters delegated to them for deliberation. The ultimate responsibility for the final decisions on all matters lies with the Board.

As and when necessary, the Board conducts a review of the delegation of responsibilities for the Company to adapt dynamically to the changing circumstances.

With their different backgrounds and specialisation, the directors bring along a wide range of experience, expertise and perspective in discharging their responsibilities and duties in managing the business affairs of the Group.

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1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (CONT’D)

1.2 Clear roles and responsibilities in discharging its fiduciary and leadership functions

The Board assumes the following responsibilities, amongst others:-

(a) Reviewing and adopting the Company’s strategic plans – The Board has in place a strategy planning process, wherein financials and strategies are presented for discussion quarterly and the Management reports on the results and challenges met. The Board objectively reviews and monitors the implementation of the plan by management and provides input and feedback to the management. Budgets are prepared periodically for the Board to assess the anticipation and to head towards the best outcome.

(b) Overseeing the conduct of the Company’s business – The Board oversees the performance of the Management by reviewing the actual performance and financial ratios of the Group, and provides guidance to the Management on measures to be undertaken to improve business performance and minimise risk areas.

(c) Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures – The Audit Committee, external auditors and internal auditors assist the Board to oversee the risk management and internal control framework of the Group. High risk areas are highlighted and the adequacy of compliance and internal controls throughout the organisation are reported to the Audit Committee and the Board.

(d) Succession planning – The Nomination Committee review potential candidates for the Board. The organisation chart is periodically reviewed to ensure that candidates of sufficient calibre are in place to manage the business and that there is orderly succession of senior management.

(e) Overseeing the development and implementation of a shareholder communication policy for the Company – The Board acknowledges the importance of timely dissemination of information to its shareholders. Announcements on the major events of the Company and financial releases provide the shareholders and potential investors with update of the Group’s activities and financial performances.

The General Meetings act as the principal forum of dialogue with shareholders. Shareholders are notified of the meeting and provided with a copy of the Company’s Annual Report and/or Circular to Shareholder prior thereto in accordance with the stipulated period set out in LR and the Act in order to enable shareholders to fully evaluation the resolutions being proposed. At each AGM, the Board presents the Group’s results and shareholders are given the opportunities to raise questions pertaining to the Group, the resolutions being proposed and the business of Superlon in general. Members of the Board and the auditors of the Company are available at the AGM to respond to all queries and to provide clarification on issues and concerns raised by the shareholders.

The Company has a website where access to its Annual Reports, announcements, quarterly financial results and other relevant information.

Mr Lim E @ Lim Hoon Nam as the Senior Independent Non-Executive Director together with Mr Liu Han-Chao, the Executive Director, represent Superlon to whom concerns of the shareholders and other stakeholders may be conveyed.

(f) Reviewing the adequacy and the integrity of the management information and internal controls system of the Company – The Board outsourced the internal audit functions to an external party to ensure the adequacy and integrity of the Company’s internal control functions. Further details of the internal control systems are set out in the Statement on Risk Management and Internal Control.

Statement of Corporate Governance(cont’d)

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ANNUAL REPORT 2017


1.3 Business Ethics

The Board of Directors is committed to practising ethical business values and conduct in all aspects of the Group’s business practice. The Board of Directors has established a Code of Conduct to provide the employees of Superlon with guidance on the standards of behaviour expected of them in performing their duties of employment and in their dealings with fellow employees, clients, suppliers and member of the community. The Code of Conduct is available on the company’s website.

Employees are encouraged to report any genuine concerns about unethical behaviour to senior management or to the Senior Independent Non-Executive Director and appropriate steps will be taken by the Company.

1.4 Sustainability Strategies

Superlon believe that the long term sustainability could be achieved with a balance between business profitability and corporate social responsibility. Various steps are undertaken by the Group to play its part in contributing to the environmental, social and governance aspects of business which underpins sustainability, including:-.

Environment

The Group currently:-

(a) uses natural gas in its various heating production processes which is safer and causes less pollution;(b) engages an accredited laboratory consultant to assist in the monitoring of the quality of its treated water,

chimney emissions and factory air to ensure compliance with the regulatory requirements at all times;(c) periodically upgrades and enhances the capabilities of its chimney filters to minimise air pollution;(d) implements an energy savings programme by progressively converting the lighting facilities to LED technology,

which consumes less energy and has a longer useful life; and(e) manufactures products with processes that do not use chlorofluorocarbons (CFCs) and hydrofluorocarbons

(HFCs), do not contribute to global warming and has no ozone depleting potential.

Welfare of employees

The Group believes in providing a safe, conducive and comfortable working environment for its employees and works together with its employees, government agencies and suppliers to promote the awareness of safety and health. A safe working environment will benefit everyone and a high level of safety can only be achieved through the co-operation from all parties.

The management is also provided with opportunities to attend internal and external training programmes to enhance one’s knowledge and skills. The Group also conducted visits to and participated in international trade fairs / exhibitions locally and overseas, to broaden the knowledge base of the employees.

Regular recreational activities and staff dinners are organised to assist the employees in achieving a balanced work life and in enhancing the rapport between the management and the staff. Group trips are also encouraged to build staff rapport and to incentivise staff for their industrious efforts.

Community

Recognising the importance of contributing to a healthy and balanced community, various donations have been made by the Group during the year to various charitable organisations, schools and others.

Every year, the Group provides opportunities for practical training for undergraduates from local universities to expose them to hands-on experience in the industry.


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1.4 Sustainability Strategies (cont’d)

Governance

Superlon is consciously focusing its efforts on the effective development of corporate responsibility governance. The Board promotes good corporate governance in the application of sustainability practices throughout the Group, the benefits of which should translate into better corporate performance.

Product

Superlon’s insulation materials are fire-resistant, dust and fibre free, and inhibit mould growth hence not presenting any health related hazards. The materials have zero Ozone Depleting Potential, zero Global Warming Potential and low Volatile Organic Compounds. Applying Superlon’s insulation materials helps to reduce energy consumption of HVAC&R products thereby improving the eco-friendliness thereof.

The Group invests continuously in R&D to improve the quality, formulation and efficiency of production.

Customers

Regular sales and technical training is provided to ensure customers are familiar with product knowledge and application. The Company actively seeks customer feedback on products and services provided.

Government and regulators

Superlon abides by the relevant laws and regulatory requirements, including the Act, manufacturing license requirements by the Malaysian Ministry of International Trade and Industry, Bursa Securities’ LR, environmental requirements by the Department of Environment, Malaysia, and others.

1.5 Board access to information and advice

In furtherance of their duties, all Directors have complete and unrestricted access to information pertaining to the Group. Prior to any Board meeting, every Director is given an agenda with the relevant information to be deliberated on. Minutes for every Board meeting are circulated to all Directors for their perusal prior to confirmation of the minutes at the following Board meeting. The Chairman leads the presentation of Board papers and discussion. Relevant Executive Directors will explain and discuss pertinent issues. All Directors are entitled to call for additional clarification and information to assist them in matters that require their decision-making. Time is also allocated at each meeting for Directors to raise matters not covered by the formal agenda.

All Directors have unrestricted access to the advice of the company secretary and external auditors whether as a full board or in their individual capacity, in the furtherance of their duties. They may obtain independent professional advice (including legal, financial, governance or expert advice) at their discretion at the Company’s expense.

1.6 Suitably qualified and competent Company Secretary

The Company Secretary attends and ensures that all Board meetings are properly convened and that accurate and proper records of the proceedings and resolutions passed are taken and maintained in the statutory registers of the Company. The Board is regularly updated by the Company Secretary on new regulations issued by the regulatory authorities, particularly on the Act and the LR.

1.7 Board Charter

A Board Charter is established to state Superlon’s commitment to corporate governance and aims to ensure that appropriate accountability and control systems are in place. The Board Charter, which will be reviewed by the Board as and when required, is published on the corporate website.


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ANNUAL REPORT 2017

2. STRENGTHEN COMPOSITION

2.1 Nomination Committee

The Nomination Committee comprises exclusively of Non-Executive Directors, a majority of whom is independent. The members of the Nomination Committee are as follows:-

Chun Kwong Pong as ChairmanLim E @ Lim Hoon Nam as MemberLim Wee Keong as Member

The Chairman for the Nomination Committee continues to be retained by Mr Chun Kwong Pong who is not related to any of the Executive Directors and/or Substantial Shareholders of Superlon.

During the FYE 2017, the Nomination Committee met once with all members present.

2.2 Develop, maintain and review the criteria to be used in the recruitment process and annual assessment of Directors

The objectives and responsibilities of the Nomination Committee are:-

• FormulatethemethodologyfortheassessmentoftheeffectivenessoftheBoardasawhole;• Formulate the nomination, selection and succession policies for themembers of the Board, Board

Committees, Senior Independent Non-Executive Director and key management as may be required from time to time, taking into consideration the Gender Diversity Policy encouraged by Bursa Securities;

• MakerecommendationstotheBoardonnewcandidatesforappointmentandre-electiontotheBoard;• ToreviewthesuccessionplanningfortheExecutiveDirectorsandseniormanagementoftheBoard;• ReviewandrecommendtotheBoardtheappointmentofmembersofBoardCommitteesestablishedby

the Board;• Conductreviewtodeterminewhetheradirectorcancontinuetobeindependentincharacterandjudgement,

and also to take into account the need for progressive refreshing of the Board;• Develop and recommend to theBoard actionplan for improvement on areas identified in theBoard

effectiveness evaluation, where applicable;• ConductperformanceevaluationontheexistingDirectorsbasedontheannualperformanceevaluations

conducted by the Board collectively;• AnnuallyassesstheindependenceoftheIndependentDirectors;• ReviewthetermsofofficeandperformanceofanAuditCommitteeanditsmemberannually;• Review the requiredmixof skills,experienceandotherqualitiesof theBoardandof theCommittees

annually;• Reviewthedirectors’continuingeducationprogrammes;and• anyothermatterswhichmaybereferredtotheNominationCommitteebytheBoard.

In view that Superlon consists of a lean management team and the principal activities are in a specialised industry, no pre-fixed criteria for recruitment is viewed necessary to be established. This creates flexibility for the Nomination Committee to seek different candidates who would have the skill matrix to support the long term strategic direction and needs of the Company. The Nomination Committee evaluates the qualification and experience of the candidates vis-a-vis the Company’s requirements and where appropriate recommends to the Board for appointment. Due consideration is given to the Board mix, the experience, expertise and personal qualities of the candidates as well as the gender diversity policy.

All new Director(s) duly appointed by the Board are subsequently recommended for re-election at the next AGM. All new Directors attend the mandatory programme by Bursa Securities to familiarise themselves with the additional requirements for a listed company.

The Board is supportive of gender diversity within the Board and currently, the Company’s Managing Director is female. The Nomination Committee adheres to the policy of identifying and recruiting the best qualified candidates including women candidates via equal opportunities to serve on its Board in the event of recruitment.


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2. STRENGTHEN COMPOSITION (CONT’D)

2.2 Develop, maintain and review the criteria to be used in the recruitment process and annual assessment of Directors (cont’d)

The Company has a transparent and formal procedure for the appointment of new directors to the Board. Assessment and recommendation to the Board of new candidates for the appointment as directors is to be made by the Nomination Committee. The newly appointed directors will retire at the first AGM and are eligible for re-appointment.

The Company’s Articles of Association provides that all Directors are to retire by rotation at intervals of not less than three years at each AGM. The directors to retire in each year are the directors who have been longest in office since their appointment or re-appointment. A retiring director is eligible for re-appointment.

The Nomination Committee has reviewed the performance of the Board based on performance evaluations conducted by the Board collectively during the financial year which assessed various areas including board composition, strategy, board meeting attendance, corporate/management reporting, human capital, risk management and investor relations, and was of the view that the Board and Board Committees have discharged their responsibilities effectively. The Nomination Committee had also discussed and recommended the retiring Directors eligible for re-election, continuing independence of Independent Directors and continuing education programmes was undertaken.

2.3 Formal and transparent remuneration policies and procedures

The Remuneration Committee comprises Non-Executive Directors, namely the following:-

Chun Kwong Pong as ChairmanLim Wee Keong as MemberYee Wei Meng as Member

The objective of the remuneration policies is to attract and retain suitable directors to lead and control the Group effectively. Generally, the remuneration of directors reflects the level of responsibility and commitment that goes with the Board’s membership.

During the FYE 2017, one meeting was held for the Remuneration Committee to discuss the remuneration for the Executive Directors and key management of the Company. All members of the Committee were present for the meeting.

Directors’ Remuneration

The remuneration of the Executive Directors is recommended to the Board by the Remuneration Committee so as to attract, retain, motivate and incentivise Directors of the necessary calibre needed to lead the Superlon Group successfully.

For Executive Directors, the component parts of the remuneration are structured so as to incentivise the individual according to the performance of the Group. The Remuneration Committee is to recommend to the Board the framework and remuneration package for each Executive Director. The Remuneration Committee meets periodically to consider all aspects of the Executive Directors’ performance for recommendation of remuneration, drawing external advice when necessary.

In the case of Non-Executive Directors, the level of remuneration is based on their level of responsibilities. The determination of remuneration packages of Non-Executive Directors, including the Non-Executive Chairman, is decided by the Board as a whole.

The respective Directors abstain from discussing and deliberating on their own remuneration and Directors’ fees must be approved by shareholders at the AGM.


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ANNUAL REPORT 2017

2. STRENGTHEN COMPOSITION (CONT’D)

2.3 Formal and transparent remuneration policies and procedures (cont’d)

The aggregate Directors’ remuneration for the financial year under review is as follows:-

SHB GROUP SHB

Executive Directors

RM

Non-Executive Directors

RM

Non-Executive Directors of subsidiaries

RM

Executive Directors

RM

Non-Executive Directors

RM

Directors’ salaries, bonuses and allowances 2,910,714 22,750 11,536 16,750 22,750Employee Provident Fund 413,550 – – – –Directors’ fees – 156,000 10,464 – 156,000Benefits in kind 51,250 – – – –

TOTAL 3,375,514 178,750 22,000 16,750 178,750

The directors’ remuneration of the Company for the financial year under review analysed in bands is as follows:-

Executive Non-Executive Directors Directors

RM50,000 and below – 3RM50,001 to RM100,000 – 1RM900,001 to RM950,000 1 –RM950,001 to RM1,000,000 1 –RM1,400,001 to RM1,450,000 1 –

3. REINFORCE INDEPENDENCE

3.1 Annual Assessment of Independence

The Nomination Committee will review the independence of the Independent Directors annually. The considerations include the relationship between the Independent Director and the Superlon Group and his involvement in any significant transaction with the Superlon Group.

Based on the assessment for the FYE 2017, the Board is satisfied that the Independent Directors have been able to discharge their responsibilities in an independent manner.

3.2 Tenure of Independent Directors

The Board will include the tenure of Independent Directors as one of the assessment criteria of the independence factor.

3.3 Shareholders’ approval for the Independent Directors exceeding nine (9) years

In the event any Independent Directors are proposed by the Board to be retained after 9 years, the Board shall seek the shareholders’ approval with justification to be provided.

The Nomination Committee has assessed the independence of the Director, Mr Lim E @ Lim Hoon Nam who has served as Independent Non-Executive Director of the Company for a cumulative term of nearly ten (10) years from the date of his appointment on 31 January 2007. Notwithstanding his long tenure in office, the Board (based on the recommendations made by the Nomination Committee (save and except for interested Director) is unanimously of the opinion that Mr Lim E @ Lim Hoon Nam can continue to act as Independent Non-Executive Director of the Company based on the following justifications:-


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3. REINFORCE INDEPENDENCE (CONT’D)

3.3 Shareholders’ approval for the Independent Directors exceeding nine (9) years (cont’d)

(i) He fulfilled the criteria under the definition of an Independent Director as stated in the LR, and thus, he would be able to function as check and balance, provide a broader view and brings an element of objectivity to the Board.

(ii) During his tenure in office, he has not developed, established or maintained any significant relationship which would impair his independence as Independent Director with the Executive Directors and major shareholders other than normal engagements and interactions on a professional level consistent and expected of him to carry out his duties as Independent Non-Executive Director and chairman of the Board and Audit Committee;

(iii) During his tenure in office, he has not transacted or entered into any transactions with, nor provided any services to the Company and its subsidiaries, within the scope and meaning as set forth under Paragraph 5 of Practice Note 13 of the LR;

(iv) He is currently not sitting on the board of any other public and/or private companies having the same nature of business as that of the Company and its subsidiaries;

(v) Other than Director’s fees and allowances paid in accordance with the industry norm and within the acceptable market rates which have been duly disclosed in the Annual Report, there are no other incentives or benefits of whatsoever nature that had been paid to him by the Company during his tenure in office as Independent Non- Executive Director in the Company; and

(vi) Mr Lim’s qualifications and vast experience in accounting and taxation matters are invaluable to the Group. He has detailed knowledge of the Group and has proven commitment and competency to effectively oversee and advise the Board.

The Board was satisfied that Mr Lim E @ Lim Hoon Nam’s long service has not affected his independence as he is independent-minded and has provided the necessary checks and balances in the best interest of the shareholders.

The Nomination Committee has also assessed the independence of the Director, Mr Lim Wee Keong who has served as Independent Non-Executive Director of the Company for a cumulative term of nine (9) years from the date of his appointment on 27 March 2008. Notwithstanding his tenure in office, the Board (based on the recommendations made by the Nomination Committee (save and except for interested Director) is unanimously of the opinion that Mr Lim Wee Keong can continue to act as Independent Non-Executive Director of the Company based on the following justifications:-

(i) He fulfilled the criteria under the definition of an Independent Director as stated in the LR, and thus, he would be able to function as check and balance, provide a broader view and brings an element of objectivity to the Board.

(ii) During his tenure in office, he has not developed, established or maintained any significant relationship which would impair his independence as Independent Director with the Executive Directors and major shareholders other than normal engagements and interactions on a professional level consistent and expected of him to carry out his duties as Independent Non-Executive Director and chairman of the Board and Audit Committee;

(iii) During his tenure in office, he has not transacted or entered into any transactions with, nor provided any services to the Company and its subsidiaries, within the scope and meaning as set forth under Paragraph 5 of Practice Note 13 of the LR;

(iv) He is currently not sitting on the board of any other public and/or private companies having the same nature of business as that of the Company and its subsidiaries;


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ANNUAL REPORT 2017

3. REINFORCE INDEPENDENCE (CONT’D)

3.3 Shareholders’ approval for the Independent Directors exceeding nine (9) years (cont’d)

(v) Other than Director’s fees and allowances paid in accordance with the industry norm and within the acceptable market rates which have been duly disclosed in the Annual Report, there are no other incentives or benefits of whatsoever nature that had been paid to him by the Company during his tenure in office as Independent Non- Executive Director in the Company; and

(vi) Mr Lim’s qualifications and vast experience in finance and engineering matters are invaluable to the Group. He has detailed knowledge of the Group and has proven commitment and competency to effectively oversee and advise the Board.

The Board was satisfied that Mr Lim Wee Keong’s tenure has not affected his independence as he is independent-minded and has provided the necessary checks and balances in the best interest of the shareholders.

3.4 Segregation of duties between Chairman and Managing Director

There is a clear and distinction of roles and responsibilities between the Chairman and the Managing Director. The Chairman of the Board is independent and non-executive. The Chairman is primarily responsible for Board effectiveness and conduct whilst the Managing Director is responsible for the day-to-day business affairs overseeing the operating units, organisational effectiveness and implementation of Board policies and decisions.

3.5 Composition of the Board

The Chairman of Superlon is an Independent Non-Executive Director. Currently of the seven members of the Board, two Directors are independent, fulfilling the criteria of one third of the Board being independent.

The Board currently consists of seven (7) members comprising three (3) Executive Directors, two (2) Non-Independent Non-Executive Directors and two (2) Independent Non-Executive Directors. The Board has a good balance of members who are executive, non-executive and independent directors such that no one individual or a small group of individuals can dominate the Board’s decision-making process.

4. FOSTER COMMITMENT

4.1 Time Commitment

Board meetings are scheduled quarterly with additional meetings to be convened as and when required. During the financial year under review, the Board met a total of seven times. The attendance of the Directors who held office during the financial year is set out below:-

Name of Director Attendance at meetings

Lim E @ Lim Hoon Nam 7/7Liu Lee, Hsiu Lin @ Jessica H. Liu 7/7Liu Han-Chao 6/7Ongi Cheng San 7/7Chun Kwong Pong 7/7Yee Wei Meng 7/7Lim Wee Keong 7/7

Based on the above attendance record, the Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of Superlon.

The Directors would notify the Chairman and/or the Company prior to accepting any new directorship in a public listed company.


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4. FOSTER COMMITMENT (CONT’D)

4.2 Training

All the Directors have completed the Mandatory Accreditation Programme prescribed by Bursa Securities. The Directors have from time to time during the financial year attended various relevant training programmes, seminars and trades shows organised by the relevant regulatory authorities and professional bodies to broaden their knowledge and to keep abreast with the relevant changes in law, regulations and the business environment, including the following:-

Lim E @ Lim Hoon NamThe effect of MPERS on Audit Evidence and Consideration2017 Budget SeminarNational Tax Conference 2016

Ongi Cheng SanAdvocacy Sessions on Management Discussion & Analysis for CEO and CFO of Listed IssuersFraud Risk Management WorkshopCompanies Act 2016 – Key Revamp Updates with Integrated Tax Planning OpportunityShare Capital At No Par Value, Share Buybacks and Redeemable Preference Shares: Accounting Implications

Yee Wei MengGuangzhou building materials exhibitionGuangzhou door exhibition

Liu Lee, Hsiu-Lin @ Jessica H. LiuACREX 2017, India

Liu Han-ChaoLankabuild 2016, Sri LankaACREX 2017, IndiaDhaka Greebuild 2017, BangladeshCIMB-Global Transformation Forum

Chun Kwong PongUnderstanding MFRS3, Business Combinations and MFRS10, Consolidated Financial StatementsValuation on Mergers and AcquisitionsSustainability Reporting

Lim Wee KeongMetaltech 2016Archidex 2016International Genetically Engineered Machine 2016

5 UPHOLD INTEGRITY IN FINANCIAL REPORTING

5.1 Compliance with financial reporting standards

The Board is responsible for ensuring that the Company’s and Group’s financial statements are in accordance with the provisions of Act and the applicable approved accounting standards in Malaysia. The Board aims to present a true and fair assessment of the Group’s financial performance, position and prospects to the shareholders of the Company. The Board is also responsible for providing a high level of disclosure to ensure integrity and consistency of the financial reports.

The Audit Committee assists the Board in its responsibility to oversee and scrutinise the financial reporting and the effectiveness of the internal controls of the Group. The Audit Committee comprises three (3) directors, all of whom are non-executive and the majority of whom are independent. Details of the composition, terms of reference and summary of activities of the Audit Committee are set out in the Audit Committee Statement.


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ANNUAL REPORT 2017

5 UPHOLD INTEGRITY IN FINANCIAL REPORTING (CONT’D)

5.2 Suitability and independence of external auditors

The Board has established a formal and transparent arrangement with the external auditors of the Company through the Audit Committee. The Audit Committee communicated directly and independently with the auditors and without the presence of the Executive Directors at least twice a year.

The Audit Committee is responsible for reviewing the scope of services provided by the external auditors. The audit planning memorandum was reviewed by the Audit Committee prior to submission to the Board for approval.

The audit fees paid by the Group for the FYE 2017 are detailed in Note 24 in the Financial Statements. No non-audit fees were paid to the external auditors by the Group in respect of the FYE 2017 save for the fees of RM4,000 for the review of the Statement on Risk Management and Internal Control contained in the Annual Report 2016.

The Audit Committee is satisfied that the provision of these services did not compromise the external auditors’ independence and objectivity. The External Auditors have also provided a written confirmation from the external auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

6. RECOGNISE AND MANAGE RISKS

6.1 A sound framework to manage risks

The Directors acknowledge their responsibility to maintain a sound system of risk management and internal controls to safeguard the shareholders’ investment and the Company’s assets. The Audit Committee has been empowered to assist the Board in fulfilling the continuous review of the internal controls and risk management matters as contained in its terms of reference.

6.2 Internal Audit Function

The internal audit functions are outsourced to an independent professional services firm and the internal auditors has an independent reporting channel direct to the Audit Committee.

The Statement on Risk Management and Internal Control in this Annual Report herein details the overview of the risk management framework and the state of internal controls within the Company.

7. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

7.1 Appropriate corporate disclosure policies and procedures

As a public listed company, the Company has put in place procedures to abide by the corporate disclosure requirements of material information as set out by Bursa Securities. The Board members are kept informed of material matters which require public disclosures and they approve the announcement of material matters prior to public disclosure.

The Board is mindful that material information is to be announced timely and that confidential information should be sensitively handled to avoid leakages leading to improper use of such information. In such circumstance, the Company will also closely monitor the market activity of its securities during a period where information is withheld. Where it is believed that such information has inevitably been leaked, immediate announcement will be made.

7.2 Leverage on Information Technology

Superlon’s website consists of the relevant corporation information including the board charter, annual report, etc. Shareholders and investors are also kept informed of all major developments within the Group by way of announcements via the BURSA LINK.


30


8. STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

8.1 Encourage shareholder participation at general meetings

In an effort to encourage greater shareholders’ participation at AGMs, the Board will serve notices for meetings earlier than the minimum notice period, whenever possible.

At the tabling of the agenda, opportunity is given to the shareholders to raise queries and seek clarification from the Board. The Company Secretary is present to assist in providing shareholders on their rights.

8.2 Poll voting

The Company will undertake poll voting at all general meetings where an independent scrutineer will be present to validate the votes cast at the general meeting. The detailed results showing the number of votes cast for and against each resolution will be announced.

8.3 Effective Communication and Proactive Engagements with shareholders

All Directors were present at the last AGM and extraordinary general meeting to engage directly with and be accountable to the shareholders for their stewardship of the Company. The Directors and external auditors were in attendance to respond to the shareholders’ queries. The AGM (and any other general meetings) also serves as a forum for the Board to engage with the shareholders personally to obtain their views and feedback. The Company also engages with fund managers and analysts from time to time.

ADDITIONAL COMPLIANCE INFORMATION

Disclosure of Related Party Transactions

The Group has taken all necessary steps to ensure that transactions which were deemed to be related party transactions were appropriately disclosed in accordance with the LR and good corporate governance.

Utilisation of proceeds

No fundraising was made from the equity market in the financial year under review.

Cost of Outsourced Internal Auditing

The costs paid to the outsourced internal auditors by the Group amounted to approximately RM27,730 for the financial year ended 30 April 2017.

Variation in results

No profit forecast was made for the financial year under review.

Profit guarantee

No profit guarantee was given for the financial year.

Material Contracts and Recurrent Related Party Transactions of a Revenue or Trading Nature (“RRPT”)

Save as disclosed in Note 32 of the financial statements for the financial year under reviews, there were no contracts or RRPT involving the interest of the Directors and/or major shareholders of the Company.


31

ANNUAL REPORT 2017

AUDIT COMMITTEE STATEMENT

1. Objective

The objective of the Audit Committee is to assist the Board of Directors in fulfilling its fiduciary responsibilities relating to the internal control, corporate accounting and reporting practices of the Superlon Group. The Audit Committee will endeavour to maintain appropriate standards of responsibility, integrity and accountability to the stakeholders of the Company.

2. Composition

The Audit Committee is appointed by the Board from amongst its Directors and consists of not fewer than three (3) Directors, all of whom are Non-Executive Directors and the majority of whom are Independent Directors.

The Audit Committee members consist of the following Non-Executive directors:-

Name Directorship Designation in Audit Committee Lim E @ Lim Hoon Nam Independent Chairman Lim Wee Keong Independent Member Yee Wei Meng Non-Independent Non-Executive Member

The Chairman of the Audit Committee, Mr Lim E @ Lim Hoon Nam, is a member of the Malaysian Institute of Accountants.

If a member of the committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced to below 3, the Board shall within three (3) months appoint such number of new members as may be required to make up the shortfall.

Each and every member of the Audit Committee including the Chairman shall hold office until otherwise determined by the Board or unless they cease to be a director of the Company.

3. Meeting and Minutes

Meetings of the Audit Committee are held at least four (4) times a year without the presence of the Executive Directors and management, except when their attendance is requested by the Audit Committee. Further meetings may be called at any time at the request of any committee member, the Company’s Managing Director, the external auditors or the internal auditors.

The Audit Committee has direct communication channels with the external auditors as it convenes meetings with them without the presence of the other Directors and employees of the Company, at least twice a year and whenever necessary.

For the financial year under review, the Audit Committee met with the External Auditors in June 2016, July 2016 and March 2017. Matters discussed included the audit review matters in relation to their annual audit as well as auditor’s independence.

The Internal Auditors met with the Audit Committee quarterly in June, September, December 2016 and March 2017 to present their reports highlighting any weaknesses and deficiencies in internal controls.

Minutes of each meeting are prepared and kept by the company secretary and are distributed to all members of the Board after the tabling for confirmation at the next meeting.

During the FYE 2017, six (6) Audit Committee meetings were held. The record of attendance of its members during their membership is as follows:-

Name Total

Lim E @ Lim Hoon Nam 6/6Lim Wee Keong 6/6Yee Wei Meng 6/6

32


Audit Committee Statement (cont’d)

4. Summary of Activities of the Audit Committee During the Financial Year

During the FYE 2017, the main activities undertaken by the Audit Committee were as follows:-

• DiscussedtheInternalAuditReportstabledbytheInternalAuditorsandrecommendedthesamefortheBoard’s notation;

• ReviewedanddiscussedtheAuditReviewMemorandumfortheFYE2017andrecommendthesameforthe Board’s notation;

• ReviewedtheGroup’sunauditedconsolidatedquarterlyresultsandrecommendedtotheBoardforapproval;• ReviewedtheAuditedFinancialStatementsoftheCompanyfortheFYE2016andtorecommendforthe

Board’s approval;• DiscussedandrecommendedthedraftAuditCommitteeReportandStatementonRiskManagementand

Internal Control for inclusion into the Annual Report 2016 for the Board’s approval;• ReviewedandrecommendedthedraftStatementinrelationtotheRenewalofShareBuybackAuthorityfor

the Board’s approval;• Reviewedandrecommendedtheproposedrenewalofsharebuy-backauthorityfortheBoard’sapproval;• AssessedandreviewedtheInternalAuditfunctionforitsadequacyandindependency.• DiscussedandrecommendedtheAuditPlanningMemorandumfortheFYE2017fortheBoard’snotation;• ReviewedandassessedtheindependenceandperformanceoftheExternalAuditors.

5. Internal Audit Function

The internal audit function is outsourced to an external consultant firm which reports to the Audit Committee and assists the Board of Directors in monitoring and managing risks and internal controls. The principal role of the internal audit includes:-

• AssistingtheBoardinthereviewoftheadequacy,integrityandeffectivenessofthesystemofinternalcontrolsof the Group to enable the Board to prepare the Statement on Risk Management and Internal Control in the Annual Report;

• PerformingriskassessmentoftheGrouptoidentifyandevaluatetheprincipalriskfactorsandensuringtheimplementation of appropriate internal control processes and procedures to mitigate these risks;

• Allocatingadequateauditresources, inaccordancewiththeinternalauditplanreviewedbytheAuditCommittee, to carry out internal audits on key operations of the Group so as to provide the Board with effective and efficient audit coverage; and

• Providingindependentandobjectivereportsonthestateofinternalcontrolsofthevariousoperatingunitswithin the Group to the Audit Committee so that remedial actions and continuous improvements can be taken in relation to any weaknesses noted in the systems and controls of the respective operating units.

The total fees charged by the external consultant firm for the internal audit services amounted to RM27,730 in FYE 2017.

33

ANNUAL REPORT 2017

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

1. Introduction

The Board is committed to maintain a sound system of risk management and internal controls to safeguard the assets of Superlon and shareholders’ investments as stipulated by the Malaysian Code of Corporate Governance and guided by the Statement on Risk Management and Internal Control : Guidelines for Directors of Listed Issuers.

2. Board’s responsibility

The Board acknowledges its overall responsibility for the system of internal control of the Group and for reviewing its effectiveness, adequacy and integrity. This include:

• identifyingandevaluatingprincipalrisksoftheGroup;• implementationofappropriateriskmanagementframeworktoprovidereasonableassurance;and• reviewingtheadequacyandintegrityofthecompany’sinternalcontrolsonthefinancial,operationaland

compliance systems.

The Board recognises that the system is designed to manage within an acceptable risk profile, rather than eliminate the risk of failure to achieve the business objectives of the Group. Therefore, the internal controls can only provide reasonable and not absolute assurance against the occurrence of any material loss or failure.

The Group will continue to take appropriate measures to strengthen the internal control environment and processes through an optimal balance between control costs and benefits.

The Board had received assurance from the Managing Director and the Finance Director that, to the best of their knowledge, the Group’s risk management and internal control system is operating adequately and effectively in line with the Group’s objectives, in all material aspects.

3. Risk management framework

The Board regards risk management as an integral part of the business operations and has approved the framework adopted by the Group to manage its risks. The Group implements an on-going process of identifying, evaluating, monitoring and managing significant risks that may affect the Group in achieving its business objectives throughout the financial year under review. This process is periodically reviewed by the Internal Auditors and the Audit Committee and areas requiring improvement are highlighted for improvement where necessary.

The following factors were considered in the risk assessment:-

• ThenatureofrisksfacingtheGroup;• TheextentofriskswhichitregardsasacceptablefortheGrouptobear;• Thelikelihoodoftherisksconcernedmaterializing;and• TheGroup’sabilitytoreducetheincidenceofrisksthatmaymaterialiseandtheirimpactonthebusiness.

The Head of each business unit participates in the identification as part of the management’s risk management initiatives. Any new significant risks identified and the corresponding internal controls implemented are discussed during periodic management meetings. These are brought to the attention of the Executive Directors, Audit Committee and/or the Board at their scheduled meetings. The Group’s key risk profile is updated regularly wherein risks identified are prioritised in terms of possibility of occurrence and the potential impact to the Group’s operation should the risks materialise.

4. Internal Audit

Superlon’s Internal Audit functions are outsourced to and carried out by an independent professional services firm to review the effectiveness and adequacy of the internal controls system and to address the weaknesses identified, if any. The Internal Audit team independently reviews the risk identification procedures and control processes implemented by the management. Any significant weaknesses identified during the reviews together with the improvement measures to strengthen the internal controls were directly reported to the Audit Committee. The Management is then to implement the rectification action plans with due follow-up by the Internal Auditors and updates to the Audit Committee.

34


Statement on Risk Management and Internal Control (cont’d)

4. Internal Audit (cont’d)

The Audit Committee continuously reviews the Internal Audit programme and the results of the Internal Audit process. Periodically, the Audit Committee will conduct an assessment covering the Internal Audit function including the adequacy of scope, functions, competency and resources and whether appropriate action is taken on the recommendations of the Internal Audit function.

The Audit Committee has obtained formal feedback from the independent Internal Auditors that based on the scope and coverage of their reviews during the year, the risk management and internal controls are adequate and effective. The Board and Management, in consultation with the External and Internal Auditors via their reports, noted that there was no material or significant losses arising as a result of weaknesses in internal controls during the financial year under review.

During the financial year under review, there were no major weaknesses in the internal controls which resulted in material losses during the financial year under review.

Having reviewed the Internal Auditors’ reports and discussed with the Internal Auditors, the Board is pleased to report that there were no significant internal control deficiencies for areas that have been reviewed.

5. Other key elements of internal control

Other key elements of the system of internal control of the Group are as follows:-

• TheGrouphasanappropriateorganisationalstructurewhichenablesadequatemonitoringoftheactivitiesand ensures effective flow of information across the Group with clearly defined lines of responsibility and authority levels.

• ThemanufacturingactivitiesoftheGroup’smainsubsidiary,SuperlonWorldwideSdnBhdareaccreditedwith ISO9001: 2008 international quality management system standard and such quality management system provides the Group with improved control of key processes and a foundation for improving quality and customer satisfaction.

• Inaddition,SuperlonWorldwideSdnBhdcomplieswith ISO14001:2004EnvironmentalManagementSystems Standard reflecting the Group’s emphasis on reducing pollution, improving environmental performance and supporting due care of the environment.

• KeyprocessesoftheGrouparegovernedbywrittenpoliciesandprocedures.• TheManagingDirector and ExecutiveDirectors actively participate in the day-to-day running of the

operations of the Group. This enables material issues to be effectively resolved on a timely basis.• TheManagementmonitorstheperformanceoftheGroupthroughkeyperformanceindicatorsandprepares

quarterly management reports. The risk management framework is embedded in the Group’s management system and is every employee’s responsibility.

• TheBoard receives and reviews information of theCompany’s financial status andperformance on aquarterly basis.

• TheAuditCommitteemeetsatleastonceeveryquarterandreviewstheadequacy,integrityandeffectivenessof the system of internal control of the Group. The Audit Committee receives and reviews quarterly financial results and internal auditors’ report before they are tabled for Board approval.

6. Summary

The Board is satisfied that the existing systems of risk management and internal control are effective in providing reasonable assurance and there were no material internal control failure during the financial year that could have resulted in material loss or contingencies that would require disclosure in the Annual Report.

The External Auditors have reviewed this statement pursuant to paragraph 15.23 of the LR and have reported that nothing has come to their attention that causes them to believe that the contents of this Statement intended to be included in the annual report are not prepared, in all material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers to be set out, nor is the Statement factually inaccurate.

DIRECTORS’ REPORT 36 – 40

STATEMENT BY DIRECTORS 41

STATUTORY DECLARATION 41

INDEPENDENT AUDITORS’ REPORT 42 – 45

STATEMENTS OF FINANCIAL POSITION 46

STATEMENTS OF PROFIT OR LOSS AND 47 OTHER COMPREHENSIVE INCOME

STATEMENTS OF CHANGES IN EQUITY 48 – 50

STATEMENTS OF CASH FLOWS 51 – 52

NOTES TO THE FINANCIAL STATEMENTS 53 – 114

FINANCIAL STATEMENTS

36


DIRECTORS’ REpORT

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 30 April 2017.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding and the provision of management services. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

The Group The Company RM RM

Profit after tax for the financial year 23,714,774 11,646,079

DIVIDENDS

Dividends paid or declared by the Company since 30 April 2016 are as follows:

(i) A special tax-exempt single-tier dividend of 4.00 sen per ordinary share amounting to RM 3,175,997 in respect of the financial year 30 April 2016 was declared on 24 March 2016, and subsequently paid on 3 May 2016. The payment was made to shareholders whose names appeared in the Company’s Record of Depositors on 12 April 2016.

(ii) An interim tax-exempt single-tier dividend of 2.50 sen per ordinary share amounting to RM 1,984,998 in respect of the financial year ended 30 April 2017 was declared on 24 June 2016, and subsequently paid on 4 August 2016. The payment was made to the shareholders whose names appeared in the Company’s Record of Depositors on 15 July 2016.

(iii) A second interim tax-exempt single-tier dividend of 2.50 sen per ordinary share amounting to RM 1,984,998 in respect of the financial year ended 30 April 2017 was declared on 15 December 2016 and subsequently paid on 19 January 2017. The payment was made to the shareholders whose names appeared in the Company’s Record of Depositors on 3 January 2017.

(iv) A special tax-exempt single-tier dividend of 6.00 sen per ordinary share amounting to RM 4,763,995 in respect of the financial year ended 30 April 2017 was declared on 24 March 2017, and subsequently paid on 5 May 2017. The payment was made to the shareholders whose names appeared in the Company’s Record of Depositors on 12 April 2017.

The directors declared an interim tax-exempt single-tier dividend of 1.50 sen per ordinary share at the Board of Directors’ Meeting on 20 June 2017 in respect of the financial year ending 30 April 2018. This dividend will subsequently payable on 28 July 2017 to shareholders whose names appeared in the Company’s Record of Depositors on 7 July 2017. This dividend shall be accounted for in equity as an appropriation of retained profits for the financial year ending 30 April 2018.

The directors do not recommend the payment of any final dividend in respect of the financial year ended 30 April 2017.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the financial year.

37

ANNUAL REPORT 2017

Directors’ Report (cont’d)

ISSUES OF SHARES AND DEBENTURES

During the financial year:

(a) there were no changes in the issued and paid-up share capital of the Company; and

(b) there were no issues of debentures by the Company.

TREASURY SHARES

As at 30 April 2017, the Company held as treasury shares a total of 600,079 of its 80,000,000 issued and fully paid-up ordinary shares. The treasury shares are held at a carrying amount of RM 339,332. The details on the treasury shares are disclosed in Note 16 to the financial statements.

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables.

At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for impairment losses on receivables in the financial statements of the Group and of the Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, which were unlikely to be realised in the ordinary course of business, including their value as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

38



CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:

(a) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; or

(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

No contingent or other liability of the Group and of the Company has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

DIRECTORS

The name of directors of the Company who served during the financial year until the date of this report are as follows:

Liu Lee, Hsiu-Lin @ Jessica H. Liu (f)Liu Han-ChaoOngi Cheng SanLim E @ Lim Hoon NamChun Kwong PongLim Wee KeongYee Wei Meng

The name of directors of the Company’s subsidiaries who served during the financial year until the date of this report, not including those directors mentioned above, are as follows:

Thashy Chacko MohanLiu Pau-Line (Appointed on 1 September 2016)

39

ANNUAL REPORT 2017

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in shares and debentures of the Company during the financial year are as follows:

The Company

Number of Ordinary Shares Balance At Balance At 01.05.2016 Bought Sold 30.04.2017

Liu Lee, Hsiu-Lin @ Jessica H. Liu (f) - Direct 17,930,274 – – 17,930,274 - Indirect (1) 7,140,000 – – 7,140,000 Liu Han-Chao - Direct 3,570,000 – – 3,570,000 - Indirect (2) 17,930,274 – – 17,930,274 Ongi Cheng San - Direct 30,102 – – 30,102 Yee Wei Meng - Indirect (3) 8,532,646 – (8,532,646) –

Notes:

(1) Deemed interest by virtue of her sons, Liu Han-Chao’s and Jeremy Liu’s direct interest in the Company.

(2) Deemed interest by virtue of his mother, Liu Lee, Hsiu-Lin @ Jessica H. Liu’s direct interest in the Company.

(3) Deemed interest by virtue of his direct and indirect interest in Transgrow Corporation Sdn. Bhd., Fontern Capital Sdn. Bhd. and Fontern Holdings (M) Sdn. Bhd..

By virtue of their shareholdings in the Company, Mdm. Liu Lee, Hsiu-Lin @ Jessica H. Liu and Mr. Liu Han-Chao are deemed to have an interest in the shares in all of its subsidiaries during the financial year to the extent of the Company’s interests, in accordance with Section 8 of the Companies Act 2016.

The other directors holding office at the end of the financial year had no interest in shares of the Company during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no directors have received or become entitled to receive any benefit (other than a benefits included in the aggregate amount of remuneration received or due and receivables by the directors shown in the financial statements or the fixed salaries of a full time employees of the Company or related corporations) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with companies in which certain directors have substantial financial interests as disclosed in Note 32 to the financial statements.

Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

DIRECTORS’ REMUNERATION

The details of the directors’ remuneration paid or payable to the directors of the Company during the financial year are disclosed in Note 31 to the financial statements.


40


INDEMNITY AND INSURANCE COST

There was no indemnity and insurance cost paid for the directors of the Company during the financial year.

SUBSIDIARIES

The details of the Company’s subsidiaries are disclosed in Note 5 to the financial statements.

SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

The significant events during the financial year are disclosed in Note 36 to the financial statements.

SIGNIFICANT EVENT OCCURRING AFTER THE REPORTING PERIOD

The significant event occurring after the reporting period is disclosed in Note 37 to the financial statements.

AUDITORS

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.

The details of the auditors’ remuneration are disclosed in Note 24 to the financial statements.

Signed in accordance with a resolution of the directors dated 28 July 2017.

LIU LEE, HSIU-LIN @ JESSICA H. LIU (f)

LIU HAN-CHAO


41

ANNUAL REPORT 2017

STATEMENT BY DIRECTORSPursuant to Section 251(2) of the Companies Act 2016

We, Liu Lee, Hsiu-Lin @ Jessica H. Liu (f) and Liu Han-Chao, being two of the directors of Superlon Holdings Berhad, state that, in the opinion of the directors, the financial statements set out on pages 46 to 113 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 30 April 2017 and of their financial performance and cash flows for the financial year ended on that date.

The supplementary information set out in Note 38, which is not part of the financial statements on page 114, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed in accordance with a resolution of the directors dated 28 July 2017.

LIU LEE, HSIU-LIN @ JESSICA H. LIU (f)

LIU HAN-CHAO

STATUTORY DECLARATIONPursuant to Section 251(1)(B) of the Companies Act 2016

I, ONGI CHENG SAN, being the director primarily responsible for the financial management of Superlon Holdings Berhad, do solemnly and sincerely declare that the financial statements and supplementary information set out on pages 46 to 114 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by }the abovenamed ONGI CHENG SAN }at Kuala Lumpur in the Federal Territory }on this 28 July 2017 }

Before me ONGI CHENG SANNG KA BIANG (W701) MIA 30665Commissioner for Oaths Chartered Accountant

42


REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of Superlon Holdings Berhad, which comprise statements of financial position as at 30 April 2017 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 46 to 113.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 30 April 2017, and of their financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and Other Ethical Responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matter to be communicated in our report.

Carrying value of inventoriesRefer to Note 10 in the financial statements

Key Audit Matter How our audit addressed the Key Audit Matter

The Group held inventories of RM 19,796,407 as at 30 April 2017.

The carrying value of inventories is stated at the lower of cost and net realisable value and estimate made by the management.

The Group determines the amount of impairment for slow moving or obsolete inventories based upon the age of the slow moving inventories.

Our procedures included, amongst others:

• Performingageingtestontheinventoryageingreportby checking to the date of the inventory purchased and produced to ensure inventories were grouped in the appropriate age brackets.

• Reviewing the accuracy of the impairment ofinventories made by the management. By re-calculating the impairment amount through multiplying certain percentages and reviewing age profile of inventories.

• Comparing the net realisable value to the cost ofinventories at the end of the reporting period to assess the reasonableness of inventories write-down.

INDEPENDENT AUDITORS’ REpORTTo the members of Superlon Holdings Berhad

43

ANNUAL REPORT 2017

Information Other than the Financial Statements and Auditors’ Report Thereon

The directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements

The directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for such internal control as the directors determines is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• IdentifyandassesstherisksofmaterialmisstatementofthefinancialstatementsoftheGroupandoftheCompany,whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and of the Company’s internal control.

• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelated disclosures made by the directors.

Independent Auditors’ Report(cont’d)

44


Auditor’s Responsibilities for the Audit of the Financial Statements (cont’d)

• Concludeontheappropriatenessofthedirectors’useofthegoingconcernbasisofaccountingand,basedonthe audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatementsoftheGroupandoftheCompany,including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithin the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significant in the audit of the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirement of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors, are disclosed in Note 5 to the financial statements.

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 38 on page 114 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.


45

ANNUAL REPORT 2017

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Crowe Horwath Ng Kim Kiat Firm No.: AF 1018 Approval No.: 02074/10/2018 JChartered Accountants Chartered Accountant

Muar, Johor Darul TakzimDate: 28 July 2017


46


STATEMENTS OF FINANCIAL pOSITIONAt 30 April 2017

The Group The Company Note 2017 2016 2017 2016 RM RM RM RM

ASSETSNON-CURRENT ASSETSInvestments in subsidiaries 5 – – 36,693,355 36,382,939 Property, plant and equipment 6 71,519,656 56,316,820 – – Prepaid lease payment 7 2,344,976 – – – Intangible assets 8 1,343,853 1,594,401 – –Other investment 9 46,667 46,667 – – Amount owing by subsidiaries 13 – – 6,532,854 2,184,120 Deferred tax assets 19 491,454 575,035 – –

75,746,606 58,532,923 43,226,209 38,567,059

CURRENT ASSETSInventories 10 19,796,407 8,537,160 – – Trade receivables 11 12,990,807 10,356,919 – – Other receivables, deposits and prepayments 12 3,154,962 1,771,840 17,273 1,040 Amount owing by subsidiaries 13 – – 85,700 33,723 Deposits with licensed bank 14 18,093,869 16,946,297 550,000 2,000,000 Cash and bank balances 14,299,496 13,452,018 5,130,241 3,896,866

68,335,541 51,064,234 5,783,214 5,931,629

TOTAL ASSETS 144,082,147 109,597,157 49,009,423 44,498,688

EQUITY AND LIABILITIESEquity Attributable to Owners of the CompanyShare capital 15 40,000,000 40,000,000 40,000,000 40,000,000 Treasury shares 16 (339,332) (339,332) (339,332) (339,332)Reserves 17 68,327,501 49,782,875 4,379,515 1,467,427

TOTAL EQUITY 107,988,169 89,443,543 44,040,183 41,128,095

NON-CURRENT LIABILITIESLoans and borrowings 18 6,547,198 1,432,285 – – Deferred tax liabilities 19 5,033,306 4,592,069 – –

11,580,504 6,024,354 – –

CURRENT LIABILITIESTrade payables 20 6,348,554 3,898,768 – –Other payables and accruals 21 8,301,913 5,201,019 194,580 189,783 Loans and borrowings 18 3,820,468 1,437,165 – – Dividend payable 22 4,763,995 3,175,997 4,763,995 3,175,997 Current tax liabilities 1,278,544 416,311 10,665 4,813

24,513,474 14,129,260 4,969,240 3,370,593

TOTAL LIABILITIES 36,093,978 20,153,614 4,969,240 3,370,593

TOTAL EQUITY AND LIABILITIES 144,082,147 109,597,157 49,009,423 44,498,688

The annexed notes form an integral part of these financial statements.

47

ANNUAL REPORT 2017

The annexed notes form an integral part of these financial statements.

STATEMENTS OF PROFIT OR LOSS ANDOTHER COMpREHENSIvE INCOME

For the financial year ended 30 April 2017

The Group The Company Note 2017 2016 2017 2016 RM RM RM RM

REVENUE 23 106,268,595 90,410,926 12,296,000 7,464,000

COST OF SALES (62,223,630) (55,117,052) – –

GROSS PROFIT 44,044,965 35,293,874 12,296,000 7,464,000

OTHER INCOME 2,995,878 949,760 67,362 74,879

SELLING AND DISTRIBUTION EXPENSES (6,558,521) (5,936,443) – –

ADMINISTRATIVE EXPENSES (10,052,733) (8,386,005) (611,895) (524,017)

OTHER EXPENSES (50,207) (366,778) – –

PROFIT FROM OPERATIONS 30,379,382 21,554,408 11,751,467 7,014,862

FINANCE COSTS (156,204) (192,570) – –

PROFIT BEFORE TAX 24 30,223,178 21,361,838 11,751,467 7,014,862

TAX EXPENSE 26 (6,508,404) (4,701,749) (105,388) (81,234)

PROFIT AFTER TAX 23,714,774 16,660,089 11,646,079 6,933,628

OTHER COMPREHENSIVE INCOME

Items that Will Not be Reclassified Subsequently to Profit or LossForeign currency translation differences 27 (17,657) – – – Revaluation of property, plant and equipment 27 3,581,500 – – –

TOTAL COMPREHENSIVE INCOME 27,278,617 16,660,089 11,646,079 6,933,628

PROFIT AFTER TAX ATTRIBUTABLE TO:OWNERS OF THE COMPANY 23,714,774 16,660,089 11,646,079 6,933,628

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:OWNERS OF THE COMPANY 27,278,617 16,660,089 11,646,079 6,933,628

EARNINGS PER SHARE (SEN)- Basic 28 29.87 20.98

48


STATEMENTS OF CHANGES IN EQUITYFor the financial year ended 30 April 2017

The

Gro

up

Att

ribu

tabl

e to

Ow

ners

of t

he C

ompa

ny

N

on-D

istr

ibut

able

Dis

trib

utab

le

Fore

ign

N

ote

Shar

e Tr

easu

ry

Shar

e R

eval

uati

on

Cur

renc

y R

etai

ned

Tota

l

C

apit

al

Shar

es

Prem

ium

R

eser

ve

Res

erve

Pr

ofits

Eq

uity

RM

R

M

RM

R

M

RM

R

M

RM

Bal

ance

at 1

May

201

5

40,

000,

000

(3

28,7

65)

1,4

33,1

82

17,

923,

773

–

2

0,91

1,94

4

79,

940,

134

Profi

t afte

r ta

x fo

r th

e fin

anci

al y

ear

–

– –

– –

1

6,66

0,08

9

16,

660,

089

Tota

l com

preh

ensi

ve in

com

e fo

r

the

fina

ncia

l yea

r

–

– –

– –

1

6,66

0,08

9

16,

660,

089

Con

trib

utio

ns b

y an

d di

stri

butio

ns to

ow

ners

of t

he C

ompa

ny:

- Pu

rcha

se o

f tre

asur

y sh

ares

– (1

0,56

7)

– –

– –

(1

0,56

7)-

Div

iden

ds to

ow

ners

of t

he C

ompa

ny

29

– –

– –

–

(7,1

46,1

13)

(7,1

46,1

13)

Tota

l tra

nsac

tion

s w

ith

owne

rs

–

(1

0,56

7)

– –

– (7

,146

,113

) (7

,156

,680

)

Am

ortis

atio

n of

rev

alua

tion

rese

rve

–

– –

(2

42,8

20)

–

242

,820

–

Bal

ance

at 3

0 A

pril

2016

/ 1

May

201

6

40,0

00,0

00

(339

,332

) 1

,433

,182

1

7,68

0,95

3

–

30,

668,

740

89,4

43,5

43 Pr

ofit a

fter

tax

for

the

finan

cial

yea

r

– –

–

– –

2

3,71

4,77

4

23,

714,

774

Oth

er c

ompr

ehen

sive

inco

me

for

the

fin

anci

al y

ear:

- Fo

reig

n cu

rren

cy tr

ansl

atio

n

diffe

renc

es fo

r fo

reig

n op

erat

ions

– –

–

– (1

7,65

7)

–

(17,

657)

- R

eval

uatio

n of

pro

pert

y, p

lant

and

eq

uipm

ent

–

– –

3

,581

,500

–

– 3

,581

,500

Tota

l com

preh

ensi

ve in

com

e fo

r th

e

fina

ncia

l yea

r

–

– –

3

,581

,500

(1

7,65

7)

23,

714,

774

2

7,27

8,61

7

F O

R W

A R

D

4

0,00

0,00

0

(339

,332

) 1

,433

,182

2

1,26

2,45

3

(17,

657)

5

4,38

3,51

4

116

,722

,160

The

anne

xed

note

s fo

rm a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

2017...2017/08/23 · were listed on 8 june 2017, bringing the share capital of superlon to a size...

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